Managed identities provide an identity for your application to use when connecting to resources that support Azure Active Directory (Azure AD) authentication. Applications can use the identity to obtain Azure AD tokens. This eliminates the need for developers to manage credentials by providing an identity for the Azure resource in Azure AD and using it to obtain Azure AD tokens. It's commonly used for applications running on Azure virtual machines, function apps, and other Azure services to securely access other Azure resources like Azure Key Vault, Azure SQL Database, and Azure Storage without embedding credentials in code or configuration files.
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